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Introduction

Topic Chosen and Its Context

The topic chosen for this research work focuses on an analysis of the impact of e-business in the banking industry. To provide an overview of this topic, Zenith Bank Plc will be used as a case study.

The rapid advancement of technology and its application by businesses seems to be accompanied by similar rapid changes in terminology. The use of the term ‘Electronic Commerce’ has been supplemented by additional terms such as e-business, e-marketing, i-commerce and more specialist terms such as e-CRM, e-tail and e-procurement (Chaffey, 2004).

In the past few years, virtually all businesses have become, to some degree or another, an e-business. The persuasiveness of internet technology, readily available solutions, and the repeatedly demonstrated benefits of electronic technology have made e-business the obvious path.

This trend continues with new technologies, such as internet-enabled cell phones and PDAs, and the trend of e-business saturation will most likely continue for some time. By selling products and services online, an e-business is able to reach a much wider consumer base than any traditional brick-and-mortar store could ever hope for (www.wisegeek.com).

Although a web presence is one of the most common implementations, e-business is much more than just a website, there are a vast array of technologies all designed to help businesses work smarter not harder (www.nb2.co.uk).

Definition of E-Business

E-commerce can best be conceived as a subset of e-business. What then is e-business? Let us start from the definition by IBM (www.ibm.com) which was one of the first suppliers to use the term: e-business (e’biz’nis) – the transformation of key business process through the use of internet technologies (Chaffey, 2004).

Electronic Business commonly referred to as “eBusiness” or “e-Business” maybe defined as the utilisation of information and communication technologies (ICT) in support of all activities of the business ( www.wikipedia.org).

E-business is a term used to describe businesses run on the Internet, or utilizing Internet technologies to improve the productivity or profitability of a business. In a more general sense, the term may be used to describe any form of electronic business - that is to say, any business which utilizes a computer. This usage is somewhat archaic, however, and in most contexts e-business refers exclusively to Internet businesses (www.wisegeek.com ).

It is fundamentally changing the way companies operate, going far beyond buying and selling over the internet, or e-commerce into the deeper layers of how companies relate to the whole chain of enterprise from raw materials through to satisfied customers (www.ebusiness-vanuatu.com).

E-Business Applied To Banking

Digital revolution has radically changed the way the banking industry offer financial products and services. The traditional brick and mortar banking is gradually giving way to e-platform, which enables the offering of financial services through the electronic media to various customers irrespective of place, time and distance (Ovia, 2003).

E-business in the banking industry is also termed “e-banking”. E-banking is based on technology that by its very nature is designed to expand the “virtual” geographic reach of banks and customers without necessarily requiring a similar “physical” expansion (www.bis.org). It is defined as “the provision of retail and small value banking products and services through electronic channels” (Al-Somali et al., 2008, www.abs.aston.ac.uk).

Banking activities in Nigeria have increasingly depended on the deployment of information technology. It is common knowledge that Nigerian banks have invested billions of naira in information technology. The IT budget for the banking industry is far larger than that of any other industry in the country.

Customers’ insatiable appetite for efficient services has compelled financial institutions’ to fast forward to a more radical transformation of their business systems and models by embracing e-banking. The huge investment in IT is justifiable as bank managers have become IT savvy (Ovia, 2001 www.thisdayonline.com ).

Reasons For Choosing The Topic

Back in 2001 I had the opportunity to serve in a Community bank as a fulfillment of my National Youth Service. The environment was such that all records were kept manually. These records ranged from waste sheets to cashbooks all duplicated in other registers. Customers were made to come along with their pass books so the bank staff could witness by signature any withdrawals and deposits made to their personal accounts. More often than not we had a host of customers come back for individual reconciliation due to mathematical/human errors on our part.

This experience was common with other banks such that personally as a customer, I disliked transacting with my bank. There was undue delays, slow processing times, bad customer service, no choice of products, mix-up in transactions coupled with the geographical locations of the banks which meant high travel costs.

It is with excitement I watched the banking industry move from a “brick and mortar” system to a technology bound environment. An insight into Zenith Bank Plc showed me how technology impacted profitability, increased their customer base thus improving efficiency. Interestingly, the bank caught my attention as it had received various awards, one for three consecutive years – “Web Jurist” Award (2004 – 2006). It is against this background I chose the above topic.

Obejctives and Research Questions

Today we live in a competitive world where ideas have become the ultimate asset of a successful company. E-business has created a forum for the Nigerian banks to compete through the provision of various products and services. It has also exposed them to numerous forces that affect international business environment.

The objectives and research questions of this project are therefore to:

Identify the impact of e-business on the banks profitability and efficiency.

Identify its effect on customer services.

What is the social impact on both customers and employees?

What are the benefits and limitations of e-business on the bank?

Overall Research Approach

This project is centered on a topic that has brought tremendous changes to the business world. In order to produce an extensive research work I intend to visit libraries, produce questionnaires, conduct informal interviews at the bank and search the internet.

Chapter 2 Information Gathering Sources of Information

My major sources of information for the purpose of this project were both the primary and secondary data.

I specifically chose questionnaires as my primary source of data as I found out that it’s one of the most practical means of gathering information first hand, particularly because individuals have different views which give you a wider range of information to work with. 100 copies would be distributed at various branches (40 to staff, 60 to customers) and the likely response rate expected is at least 80%.

The secondary data was obtained from various sources. I used books by different authors, journals, the internet and the banks’ five year financial summary. I used them because they provided me with information researched by renowned authors and bankers.

This was pleasing as they are well respected people and consequently their judgment can be trusted. I couldn’t do without the banks five year financial summary, I knew it would provide me an indepth insight in to how e-business had improved the banks profitability.

Description of Methods Used To Gather Information

Online access was my first point of call but I didn’t start until I had spoken to the head of IT in the office where I worked. He actually thought me what it meant to search for information on the internet. A number of websites were consulted (see bibliography) and this was possible using google (a popular search engine, a tool for finding resources on the World Wide Web (www.google.com ). I was amazed at the volume of information I obtained and this has left me with a broad knowledge on the topic.

I then proceeded to visit three different libraries. I visited Yaba College of Technology Library, Chartered Institute of Bankers of Nigeria library and the Nigerian Institute of Management library.

I visited Zenith bank to obtain information ranging from the banks financials, informal interviewing of staff to distribution of the questionnaires (see appendix 1) designed for customers and staff of the bank. This was distributed over a four day period because I chose branches at different locations.

A “questionnaire” is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Although they are often designed for statistics/statistical analysis of the responses, this is not always the case. The questionnaire was invented by Francis Galton/Sir Francis Galton. Questionnaires are used by sociologists, positivists prefer closed questions.

Questionnaires have advantages over some other types of statistical survey/surveys in that they are cheap, do not require as much effort from the questioner as verbal or telephone surveys, and often have standardized answers that make it simple to compile data. However, such standardized answers that make it simple to compile data (www.wikipedia.org).

Limitations of Information Gathering

Gathering information for this research project took me places I would ordinarily not have gone. The first issue I encountered was visiting University of Lagos library to obtain information as I felt it was a sister school to Yaba College of Technology where I had graduated. I was turned down because I didn’t have permission to use the library.

I then went back to my school which was also going to turn me down because I didn’t have a library card. I was an old student who had graduated a long time ago, by this time I had become a bit discouraged, fortunately I had my old student identity card and eventually was permitted to use their facilities.

The second issue I had was the fact that I had to rely on information researched by various authors as well as the internet. For me it was second hand information, this made me determined to use questionnaires in order to obtain fresh views from people (customers and staff) directly involved.

Administering the questionnaires also came with its own limitations, some customers were not willing to fill them, they couldn’t be bothered and they just wanted to be about their businesses. Some even took copies saying they will fill them later and drop them at the customer service unit but never did and as such about five copies did not get back to me, though this was pleasing because I had actually anticipated a lower response rate.

As I watched some fill the questionnaires I realized that some answers actually depended on the respondent’s mood or state of mind whilst some were genuinely interested in the research work and asked questions about its aims and objectives, what school I attended and some are actually going to get their children to register for ACCA .

Apart from these, questionnaires are sharply limited by the fact that respondents must be able to read the questions, understand the questions and respond to them. Thus for some demographic groups conducting a survey by questionnaire may not be practical. As a type of survey, questionnaires also have many of the same problems relating to question construction and wording that exist in other types of opinion polls (www.wikipedia.org).

Lastly, talking to a few of the staff in different departments was interesting but not easy. This is because each of them had very busy schedules (in particular the information technology (IT) department) and hardly had time for a chat. It is indeed a very busy environment.

Ethical Issues Identified

This research project basically did not expose me to any ethical issues apart from wanting to use the University of Lagos Library without proper authorization. It was resolved by using other libraries and sources of information.

Accounting and Business Techniques and Limitations

The accounting technique used in this research work is “Trend Analysis” to measure the financial performance of the bank whilst Porters value chain has been adopted for the business technique in order to highlight the activities in Zenith bank which add value and create a competitive advantage.

Trend Analysis: I used this accounting technique as a financial performance measure to compare on a year on year basis (between time periods 2003 to 2007), the profitability of the bank using its five year financials. (See appendix 2)

Using trend analysis, comparative figures for one or more years provide information about the way in which the performance and financial position of a business has changed over a period. Published accounts give comparative information in two main areas:

the corresponding amounts for items shown in the statements of financial position, comprehensive income, cash flows and changes in equity and notes

historical summaries of information covering several years

It may be possible to predict future performance from trend information, particularly if the figures are very stable. Trend information should be interpreted with caution because it does not take account of the effect of inflation (Kaplan, 2008/09).

The non financial performance measures are measures of performance based on non-financial information. They are becoming increasingly important both to management and to shareholders and other interested parties external to an entity.

Ratio analysis and other interpretation techniques based on the financial statements cannot measure all aspects of performance. For example, the effect of a business on the environment cannot be measured using financial criteria, but it is increasingly regarded as an important aspect of performance (Kaplan, 2008/09).

Porters value chain: Value chain analysis is a powerful tool for managers to identify the key activities within the firm which form the value chain for that organization, and have the potential of a sustainable competitive advantage for a company (www.coursework4you.co.uk).

Porter and Millar stressed that the information system is ‘more than just computers’ and suggest that the influence of the information systems can be seen clearly by looking at the value chain. The idea behind the value chain is that the firm can be regarded as a series, or chain, of basic activities that each adds value to the products or services, thus making them more desirable to the customers. The value of each activity, weather ‘primary’ or ‘support’ should be helped by the use of IT and can help identify where competitive strategies can be applied (Kaplan, 2006/07).

‘Every value activity has both a physical component and an information-processing component. The physical component includes all the physical tasks required to perform the activity. The information processing component encompasses the steps required to capture, manipulate and channel the data necessary to perform the activity’ (Porter & Miller) (Kaplan, 2006/07).

The limitations of the model include the fact that ‘value’ for the final customer is the value only for the theoretical context (svesson, 2003), and not practical terms. The real value of the product is assessed when the product reaches its final customer and any assessment of that value before that moment is only something that is true. Despite this limitation, analysts can effectively use the value chain model to determine the value to the final consumer in a theoretical way (www.coursework4you.co.uk ).

Chapter 3 Historical Review

Banking in Nigeria up until the second half of the 1980s were devoid of any electronic devices as they were mostly manual and fraught with attendant problems. The era of new generation banks brought competition into the industry and the need to provide better quality services to the banking public occasioned the need to install some form of automation and processing then extended to provision of banking services (Mallam, www.cenbank.org).

The banking industry is information intensive and as such the cry for e-business (e-commerce) began as far back as 2001. The Managing Director, Bureau Fax Limited, (BFL), a Lagos-based IT solution provider, Mr. Tope Onibolu, called upon the Central Bank of Nigeria to acquire all required Information Technology infrastructure that will guarantee perfect sharing of information between it and other financial institutions so as to respond adequately to fund transfer in the global electronic market-place.

According to him “Central Bank of Nigeria (CBN) needs to provide a suitable infrastructure that will guarantee strong conductivity between itself, commercial merchant banks, stock brokering and issuing firms, insurance firms, finance houses and community banks and myriad others to effect proper financial transaction in e-commerce at all times” (Johnson, 2001 www.thisdayonline.com).

This era heralded the installation of massive computer systems and the introduction of the first set of Electronic Banking devices, namely, Automated Teller Machines to the banking public. With more banks coming into the system in the early 1990s MI-fledged banking systems were installed and the ledger books were being quickly replaced by computer systems (Mallam, www.cenbank.org).

Current Trends

In Nigeria today, banking has become extremely competitive and this has engendered an atmosphere in which banks now realize that the increasingly discerning and less loyal customers demand high quality service. In the bid to improve and stay ahead in service delivery, automation and computerization has become the order of the day. To achieve this, banks are pursuing two strategies;

Improving turnaround time in the Banking hall

Preventing the customers from coming to the banking hall, by providing remote electronic means (Mallam, www.cenbank.org).

History of Zenith Bank Plc

Zenith Bank Plc was incorporated in May 1990 and began its operations in July same year as a commercial bank. In June 2004, it became a public limited company and was listed on the Nigerian Stock exchange in the same year.

It is one of the most profitable banks in Nigeria having over 250 branches with all activities integrated using IT and having excellent backup emergency plans.

The bank started its operations (even as a commercial bank) as an IT driven organization. The main sponsor of the bank is an IT professional and that was inculcated into the running of the bank right from its inception. It served as the niche through which the bank penetrated the market as there were organizations then that wanted a bank that could offer some IT driven services to aid the running of their businesses.

Zenith bank coming on that platform endeared her to such organizations that were multinational in outlook. The effect of this is that more capital was made available to the bank to expand and improve its IT infrastructure and further develop products that run basically on an IT platform working to ensure the bank achieves the lowest down time.

E-Business In Zenith Bank PLC

Zenith bank has a software development unit whose sole aim is to continuously explore ways of automating all various functions of the units (departments) of the bank. Virtually all the units run on single software (phoenix) developed in-house and tailored to meet each unit’s needs. An example is the customer service unit which uses the program to capture the customer database and also access customer account balances.

The bank has recorded the largest IT department owned by any bank with over 300 staff. These staff consists of specially trained marketers, computer programmers, engineers and data base administrators who design and build the most multifaceted but user friendly solutions as they are often mindful of supporting not only the staff of the bank but also their customers.

E-business, rather than creating job loss in the bank, has created an opportunity for the bank to recruit the best hands for the job. Even better, it has created a forum for employees to develop themselves by way of trainings and acquisition of new skills to equip themselves for the challenges of the new banking horizon.

The bank has secured its customer base (in particular the corporate customers) and as such increased profitability and efficiency using e-business solutions to create products. These solutions are grouped into four categories each having sub products:

Collection Solutions:

Bank Branch: This solution enables the clients’ (merchant) use the bank as a medium to receive payment from their customers either for goods purchased or services rendered. The client’s customers can make these payments at any of the Zenith bank branches designated to collect such payments (usually almost all the branches are involved). Examples of such clients registered with the bank are Virgin Atlantic, KLM, Lagos State Tax collection. The bank charges the some clients’ an integration fee as solution is customized, whilst customers are charged transaction fee, hence the bank profits and the customers in turn are satisfied in that they save time and commuting costs to their clients’ offices.

Webpay: This allows customers settle their bills for goods and services over the internet direct from their account to the vendor or suppliers’ account right from the convenience of the customers’ office or home. For Individual accounts it is termed “online bills payment”.

Electronic Point of Sale (POS): This is a device which allows customers pay for goods purchased using their debit or credit card. This means customers do not have to carry cash invariably eliminating the risks associated with cash.

This benefit the client (merchant) in that business can be in operation for extended hours and also save processing time. The bank in turn will also profit as a transaction fee will be charged.

Payment Solutions:

Automated Cheque Writing System: With this solution, cheques and drafts do not have to be written manually. It gives the customer two choices either to have the bank install the application in their (customer’s) office or send a soft copy with a list of the beneficiaries to the bank. The bank will then print the cheques on their behalf.

Corporate I-Banking (Automated Direct Payment Plus): This allows the transfer of authorized payment instructions from a customer’s corporate account to any stipulated account(s). It is an online electronic system and transfers can be done between zenith and non Zenith accounts. This means payment can be made to any set of people (supplier, contractor, staff etc) without having to do anything manually, there is no physical prescience required.

Payroll: Instead of organizations paying cash or issuing individual cheques to their employees, they only need to send a soft copy of the payment instructions in the format required by the bank. The bank then credits the accounts of the beneficiaries immediately. This gives the bank competitive advantage over other banks who offer this service in 24hours or more as opposed to an immediate crediting of the recipients account.

ATM Salary Solution: Employers can pay their employee salaries through Zenith bank without necessarily having to hold an account (savings or current) with the bank. The bank creates virtual accounts where their salaries can be paid. To access their account an Interswitch card will be issued them which can be used at any ATM (Automated Teller Machine). Interestingly this service is free to the user; there is no cost for the cards. I see this as a form of promotion which still tends to future profitability as customers may be drawn to other products of the bank. The ATM is powered by a Nigerian company, Interswitch.

Swiftpay/Key Distributor Scheme: This allows customers monitor transactions between them and their distributors from the distributors account to their own account. The account is maintained with the bank as a “trading” account and is specifically designed to monitor trade transactions between the distributor and the customer. It gives allowance for businesses to operate with ease.

Reporting and Monitoring Solutions:

Alertz: This is a transaction notification medium whereby a message is sent via mobile phone or email to customers subscribed to the service informing them of transactions (deposits, withdrawals, monthly statements notifications etc) on their account. There’s usually a charge for the messages sent to the phones, again another means to profit by the bank.

Recon Tool: This works like an accounting software, used in reconciling bank statement to the cash book. In this case it reconciles the bank statement to the customers cash ledger statement, hence a customer can reconcile her account within minutes as opposed to the traditional method of ticking and matching which is time consuming.

Zmobile: This solution not only enable customers monitor their accounts but also enable them to carry out banking transactions (at anytime and anywhere in the world) on their mobile phones including Java enabled phones. Such transactions include bill payments, account transfers etc.

Card Solutions: The aim of this solution is to encourage a cash based economy like Nigeria to go cashless creating safety in the business environment. I asked what made Zenith bank cards special and was told they are a hybrid of magnetic stripe and chip hence more secure than the other Cards. The usage is not just restricted to the shores of Nigeria, they can be used anywhere in the world at any electronic channel (for example ATM) where you have the MasterCard logo. The Card solution has the following types of cards:

International Cards (MasterCard, Visa). An example of the MasterCard is the Websurfer used only to make internet payments.

Local Prepaid Cards (customized). An example is the Nigerian Immigration Service (NIS) Pay Card.

Local Debit Cards (customized). An example is “My Silverbird Card” used to make payment at the Silverbird Cinema.

The bank profits from Card solutions by charging the end users of the card a stipulated fee (a fixed percentage) for any form of withdrawals or payments made and still keeps their the customers’ satisfied with the service provision.

Other products offered by the bank include:

Western Union Money Transfer: This encourages international money transfer. Non-customers can receive funds from any part of the world without having to run an account with the bank.

Telephone/Mobile Banking: It’s another means by which customers can carry out their normal banking transactions, for example bills payment, funds transfer. The issue of being physically at the bank to effect transactions has now become a matter of choice.

Another area where the bank has increased its profitability and efficiency are evident in the way e-business has been inculcated into the activities of the each unit in the bank.

Customer Services: Accounts can be opened online by filling the necessary forms following a simple step. Enquiries can be made over the internet and the bank promises a quick response time. Customers are in control of their accounts as they can view them online.

Human Resources Management: Potential employees requiring joining the bank’s workforce can apply with ease as recruitment and selection processes are automated. The payroll system is also automated allowing for accurate staff salary and benefit calculations.

Treasury Operations: All investments relating to treasury have also been automated. The types of investments available and the benefits accruing from these have been placed on the Bank’s website. This helps the banks accuracy in terms of information and calculations.

Internal Control: An audit trail of activities is now possible. Information can easily be verified and traced back to its origin. This is more like “big brother” operation. All the auditors in the wide spread branches report to the head office and they all have access to all the activities of each unit of the bank. A “check list” has been integrated into the system, this list out all the functions the auditor is expected to carry out. For example if accounts’ have been opened for customers’, the auditor uses the “check list” to see if all necessary documentation has been collected from the customer. They do this by logging unto the customer service unit section. Any outstanding document is saved on the check list and submitted to the head office.

Marketing: Marketers take advantage of the fact that the banks products are electronic and so their selling point is simply promoting the banks products by informing a prospective customer about the services they can get using the banks products. Their activities are recorded each day on a “call memo”. This helps in tracking the work done and follow-up activities required. E-business also helps the marketing staff prepare reports required for management purposes.

Benefits and Limitations of E-Business In Zenith Bank Plc

The introduction of e-business has brought about a radical change to banking making the industry quite attractive. Whilst its benefits cannot be over emphasized, there are certain limitations to which critical attention must be paid.

A few of these benefits are highlighted below:

Many back office activities that required a physical presence have now been automated. For example, a customer who needs to open an account with the bank can do so online at the banks website hence reducing paper works.

Cashiers do not have to reconcile customers’ account using the traditional method. As soon as a transaction takes place the system automatically effects the changes and customers can assess their account balances immediately.

Card holders can make withdrawals and deposits by using the ATM. This has helped reduce congestion in the bank; it’s reduced the issues of over /underpayment of cash to customers. Where there is an issue of overpayment, the cashiers will have to pay the bank out of their own pockets. Using the ATM has also saved the customer time and travel costs thus increasing the bank’s profitability.

Advertising and marketing costs have been greatly reduced as the bank has a web presence which explicitly explains all the products and services including benefits obtainable from using them.

Walk in Customers need not bring any form of identification to withdraw cash from their accounts as Images of customers’ are stored on the computer systems once they are registered with the bank. For cheque withdrawals, images of both the cheque and the recipient are stored on the computer before making payments.

The limitations would include the following:

Security: Cybercrime is one issue both the banks and the customers are battling with. There’s been an alarming rate of ATM fraud committed by hackers who successfully clone customer cards or create websites resembling the banks website. Card holders have become skeptical about using their cards online as they cannot trust that the integrity of their data will be maintained.

Some of the customers did mention that the only problem they have with using the ATM is the problem of thieves/armed robbers robbing them of the cash taken from the machine.

Social Acceptance: Although a very large part of the population today are aware of e-business a large proportion of these people still believe in the cash based system largely because of illiteracy. The bank needs to organize forums where these classes of people can be educated.

Infrastructural Needs: This affects both the banks and the customers. The lack of infrastructures (such as satellites) upon which IT systems can be built greatly impedes the level of service that can be provided. A large proportion of the customers does not have access to internet services from the comfort of their homes and cannot totally enjoy the benefit of online banking.

Maintenance Cost: The cost implication of maintaining the IT infrastructure is quite high especially because technology is constantly evolving. Another area of concern is the lack of power (electricity) to run these equipments. This has increased the cost of information.

Inspite of these limitations, Zenith bank is one bank that has stood the test of time because it understands the value of technology in delivering quality services and it constantly seeks new methods in producing secure products to boost the confidence of its customers’.

Findings

A survey was conducted using questionnaires. The results are analyzed as follows:

Of the 100 questionnaires distributed at different branches, a total of 95 were returned – 40 from staff and 55 from customers.

50% were male (18% staff and 32% customers) of which 15% have been with the bank under 5 years, 23% have been with the bank between 5– 9years and 13% have been with the bank 10 years and above.

The remaining 50% were female (23% staff and 26% customers), 23% have been with the bank under 5 years, 18% have been with the bank between 5 – 9years and 8% have been with the bank 10 years and above. Overall the bank has been able to retain a large number of both its staff and customer base. It goes to show the satisfaction they get from the banks services.

85% believe the bank has been efficient over the years. This means to a very large extent the bank has been consistent with its pursuance of excellence in rendering services to its customers. Whilst 15% do not agree with this, they believe more grounds need to be covered.

50% agree that the banks services were very good before the introduction of e-business products. 40% agree that the services were fair, 7% thought the services were poor and the rest of the 3% did not answer the question because they didn’t know anything about the banks products 6/7 years ago.

90% of the customers and staff agree that the introduction of e-business has improved the banks services. Some customers believe the bank has saved them time, cost of commuting, improved their businesses and service delivery without having to go to the bank. The rest of the 10% do not agree with this as they don’t believe these products are secure and see them as risky.

A total of 83% of the customers and staff use one form or another of the banks products (western money transfer, AlertZ, internet banking, zmobile, ATM, Telephone/mobile banking, debit/credit cards, online bills payment) whilst a total of 7% customers do not use them at all (2% are not interested, 5% because of security reasons). It is obvious that more people have become aware of the use of IT in conducting their day to day activities which is impressive especially in a country that still believes in running cash based system.

80% agree that the quality of the banks products is excellent, 15% agree that it is good again acknowledging the ease that accompanies the use of e-business. The rest of the 5% believe that it is poor because they previously encountered some problems. For example some believe Zenith ATM is a bit complicated as compared to other banks because you have to remove your card before the cash. They have failed to see the advantage in this which is the fact that they could never forget their cards in the machine.

97% of the customer and staff would rather bank with Zenith because they have confidence in associating with the bank whilst 3% would rather bank with old generation banks, a culture that needs revolution through the power of knowledge. Although one of the customers complains was Zeniths cash collection method. They believe this area is still a bit cumbersome, time consuming and needs improvement because customers not only have to fill their tellers they also have to fill a separate register.

Figure 1: Pie chart showing combined Percentage of Customers and Staff

The social impact on both the employees and customers of the bank cannot be ruled out. The employees did mention that e-business has taken a lot of pressure off them. Each customer is unique and come in with different issues.

E-business to them has greatly reduced the number of complaints from customers’ to the bank. It has made the employees carry out their work with an improved level of efficiency and effectiveness. Whilst for the customers’ e-business has brought the bank to their door steps. They have fewer reasons to be at the bank.

Below is an extract of Porters Value chain adapted to highlight the use of IT in the activities of the bank including a table represented by graphs illustrating profitability and balance sheet size with reference to the percentage increases over a 5 year period, where N represents ‘Naira’ the Nigerian currency.

Firm Infrastructure

Management attitude , style and awareness, office automated systems, Intranets

Human Resources Management

Workforce recruitment, remuneration and training

Technology Development	Pheonix software, design of electronic products
Procurement	Computers, laptops, printers, hub, projector

Inbound logistics

-Receiving deposits

-Paying out Cash

-Draft issuance -Internet trading

-Funds transfer

Operations

Integration of

banks systems to other banks network

Outbound logistics

Product promotion

Marketing and sales

-online enquiry system for customers

-Account opening

-Balance enquiries

Services

Figure 1: Porters Value Chain

Support Primary Activities Activities

Source: ACCA text-Business Information Management (2006/07) Adapted to Zenith Bank Plc

Year	Profitability Billion (N)	% Increase/ Decrease	Balance Sheet Size Billion (N)	% Increase/ Decrease
2002	3.5	-	9.3	-
2003	4.4	26	11.3	22
2004	5.2	18	19.3	71
2005	7.2	39	33.3	73
2006	11.5	60	61.1	84
2007	17.5	52	83.4	37

Table: Summary of Profitability and Balance Sheet Size

Figure 3: Graph Showing Profitability and Balance Sheet Size

Figure 4: Graph Showing Percentage Increase

The figures for the year 2002 have been included in order to determine the percentage increase of the following year (2003). It does not form part of the analysis or the graphs. This figure (2002) was not available online on Zenith website. This was obtained from the bank.

From the above table, it is obvious the bank has recorded significant profits year by year (2003- 2007). It has made a significant leap from N4.4billion to N17.5billion whilst its balance sheet size is not left out; it’s increased from N11.3billion to N83.4billion. This is evidence that IT products designed and services rendered by the bank are recognized and embraced by the populace.

However, it must be noted that though profit increased in each year, the proportion of increase fluctuates (see figure 3). The management must be careful to note what products or services reduce profits at any point in time. In other words identifying products or services that are loss leaders and making strategic plans to curb them.

Recommendations and Conclusions

E-business, as noted earlier has had a tremendous impact on Zentih bank activities. There are however improvements which could be made to issues observed, thus increasing customer satisfaction and profitability.

Security is of high importance. The bank needs to be ahead of the fraudsters by cautiously developing highly secured products. Customers also ought to be informed of the security that exists on the products they use and how to preserve this. For example customers should be informed never to disclose their PIN to another party. The customer should change/review his/her PIN regularly.

The issue of security necessary to curb armed robbery may very well be beyond the bank. I say this because security is one major problem in Nigeria, hence the government should be called upon to put measures in place that would generally safe guard lives and properties in the country.

Regular forums can be organized from time to time targeting the proportion of customers who don’t understand the value of e-business. Large proportions of these customers’ are illiterates and can be reached through various mediums in particular the media. They will always listen to news on the radio; watch television; read newspapers translated in the local language.

A continuous research and development into future infrastructural needs that would accommodate the ever changing IT world needs to be embraced.

Another area of improvement is the cash collection system of the bank. The bank can adopt other banks method by allowing customers fill only one teller which the cashier should input into the system immediately and produce a hard copy for the customer. Within minutes of this transaction a notification is sent to the customers email and telephone, a further proof that the customer’s account has been credited.

In conclusion, e-business has served as a means of differentiating products and services towards achieving a high competitive advantage. Customers have access to improved service delivery and variety of products. This is evidenced in the increase in the customer base and profitability.

E-business has been well accepted over time building an improved business economy in the country and opening channels for international trade attracting, foreign investors. It is fast standing as the back bone of any successful company.

This research work has exposed me to the success of the banking system in Nigeria and its rapid growth due to technology, particularly its impact on a nation whose belief system is centered on a cash based culture.

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